The Gauteng High Court ordered Itumeleng Mafoko and Mabuyi Memela – the director of Leratadima Marketing Solutions, which received a loan from VBS Mutual Bank to supply government agencies with television sets – to repay R100 million with interest.
VBS Mutual Bank
In a judgment delivered on February 9, Judge Avrielle Maier-Frawley ordered Mafoko and Memela to pay VBS R100 million, plus interest on this amount calculated from the date VBS began demanding repayment (28 November 2019) until the date of final payment.
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Both are Leratadima’s responsibility, with the debt now falling on his shoulders, as the court has decided.
The liquidators of VBS, who have tried to recover the lost funds from what they called The Great Bank Heistsupporting in court that the responsibility of Mafoko and Memela as guarantors is not limited to Leratadima’s debt arising from the loan, but includes responsibility for other debts linked to money.
The company secured a R345 million contract with the state-owned Universal Services and Access Agency of South Africa (Usaasa) in 2015, which approached VBS for funding.
The company manufactures, supplies and ships half a million digital terrestrial television set-top boxes and related equipment.
Among the many loans granted to VBS clients without the necessary approval was the contract financing facility granted to Leratadima, which was initially R100 million but later increased to R250 million as a non-performing loan.
According to the report of Advocate Terry Motau who investigated VBS affairs, Leratadima was only a start-up without a balance sheet when it was given the initial loan facility, while VBS’s qualifying capital was only R70 million.
Leratadima must pay the debt with the money that will be obtained from the contract with Usaasa. However, the two entities became embroiled in a dispute that halted the flow of funds.
Leratadima accessed funds from VBS from January 2016 until at least November 2017, shortly before VBS was placed into receivership and all of its credit accounts were suspended.
At that time, Leratadima was still under contract with Usaasa and needed additional funds from mutual banks.
A request for an additional R25 million was rejected, and the bank’s lawyers issued a demand for payment of more than R150 million, with interest.
But Leratadima said the bank breached the agreement, saying it had to provide full funds to complete the contract with Usaasa.
This, they argue, is the reason for them to be exempted from liability under the guarantee agreement, saying that VBS acted “unlawfully and unilaterally”.
This article originally appeared on Moneyweb and is republished with permission.
Read the original article here.
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